You are using an older browser version. Please use a supported version for the best MSN experience.

Growth in retiring baby boomers strains US welfare programs

The Wall Street Journal. logo The Wall Street Journal. 6/21/2018 Janet Adamy and Paul Overberg

The surge of retiring baby boomers is reshaping the U.S. into a country with fewer workers to support the elderly—a shift that will add to strains on retirement programs such as Social Security and sharpen the national debate on the role of immigration in the workforce.

For most of the past few decades, the ratio of retiree-aged adults to those of working age barely budged. In 1980, there were 19 U.S. adults age 65 and over for every 100 Americans between 18 and 64, census figures show. That number—called the old-age dependency ratio—barely edged up over the next 30 years, rising to just 21 retiree-aged Americans for every 100 of working age in 2010.

Get news and analysis on politics, policy, national security and more, delivered right to your inbox

But there has been a rapid shift since then. By 2017, there were 25 Americans 65 and older for every 100 people in their working years, according to new census figures released Thursday that detail age and race for every county. The ratio would climb to 35 retiree-age Americans for every 100 of working age by 2030, according to census projections released earlier this year, and 42 by 2060, though currently unforeseen factors could alter that.

“You have this top-heavy age distribution that is basically uncharted waters,” said Paul Taylor, author of “The Next America” who has studied the aging population. “The failure to face what’s evident, right in front of our eyes, is a form of generational theft,” he said, referring to the financial consequences for subsequent generations.

The new census figures also show that the number of whites who aren’t Hispanic fell slightly in 2017. Revised estimates for 2016 also showed a small decrease. If it is not revised, the overall decrease of about 41,000, or 0.02%, would be the first on record, according to William Frey, a demographer at the Brookings Institution.

The finding showcases the long-term aging of the white population due to lower birth rates and shifts in where immigrants come from. In the majority of states, non-Hispanic whites are dying faster than they are being born, according to a recent study by the Applied Population Lab at the University of Wisconsin.

The retiree surge, which has been long expected, began when the first baby boomers—whose birth years span 1946 to 1964—turned 65 in 2011. About 10,000 baby boomers turn 65 each day, Mr. Taylor said. Lower birth rates that began in the 1970s thinned the ranks of the working-age population in the generations that followed them. An immigration boom wasn’t enough to offset that.

Even as the U.S. ratio grows, it would remain lower than those of many developed nations. In 2025, when the U.S. ratio is expected to reach 33 older adults per 100 of working age, Canada’s would reach 40, Germany’s 44 and Japan’s 58, according to census projections. By comparison, India’s ratio would reach 13, Mexico’s 16 and China’s 22.

The figures are the latest sign that the U.S. safety net for seniors will become even more stretched for cash. Earlier this month, the trustees for Social Security said the program is dipping into its trust fund for the first time since 1982 to pay benefits. States also face mounting employee pension costs that have led them to pare spending on programs like education and health care.

State pension funds had $2.6 trillion in assets to cover liabilities of $4 trillion in fiscal 2016, according to an April analysis of the most recent publicly available data by the Pew Charitable Trusts. The gap between assets and liabilities is up $295 billion from the prior year and is due in part to investments falling short of states’ assumptions, the report said.

The new census figures show clusters of rapidly graying counties concentrated in the Northeast, Upper Midwest and across southern and western coastal areas that attract retirees.

The state with highest age-dependency ratio is Florida, where there are 34 retiree-aged people for every 100 of working age, the new census figures show. That ratio has risen more slowly than the rest of the country’s since 2010, as its economy draws young migrants, especially from Puerto Rico. Since 2010, Florida also has added more than 600,000 immigrants, mostly from the Caribbean and Central America.

The ratio is lowest in Washington D.C., at 17, followed by Alaska, Utah and Texas at 17, 18 and 20, respectively.

A lull in the U.S. birth rate since the 2007-09 recession is making the whole country more reliant on immigrants, who are typically young adults, to slow its aging. At the same time, though, there is a crackdown on immigration that could undercut that dynamic in the future.

American women are having children at the lowest rate on record, and the number of babies born last year hit a 30-year low. The median age of Americans was 38 in 2017, up almost a year from the start of the decade.

Related video: Chinese Women Turn to This American for Advice on Life and Love



More from The Wall Street Journal

The Wall Street Journal.
The Wall Street Journal.
image beaconimage beaconimage beacon